Raymond aims to be net debt free in 3 years

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Branded fabric and fashion retailer Raymond Group aims to be net debt free in three years, although it would launch the initial sale of the wholly-owned JK Files and Engineering (JKFEL) stake this fiscal year.

“The company is focused on managing liquidity through cost reduction and working capital optimization initiatives with the stated goal of becoming a net-debt-free company within the next three years,” according to its report. annual for the 2021-22 financial year.

Raymond also expects the proceeds from JKFEL’s planned initial public offering (IPO) in FY23 to deleverage its balance sheet and help free it from net debt.

JKFEL, under which the group has grouped its tooling, hardware and automotive accessories businesses, had offered to launch the IPO, with Raymond participating as a selling shareholder.

The red herring outlook draft, or initial documents, was filed in December 2021 and gained market regulator approval on February 23, 2022, while the IPO was scheduled for March this year.

“However, due to the volatility in the global stock markets caused by the protracted conflict between Russia and Ukraine, it was decided to wait for the opportune moment for the IPO of JKFEL. The Board of Directors expects to complete the SFO in fiscal year 2022-23, when stock market conditions for fundraising would be favourable,” he said.

Raymond had reduced its net debt to Rs 1,088 crore at the end of FY22, from Rs 1,416 crore in FY21 and Rs 1,859 in FY20. The group’s net debt to equity ratio fell to 0.4 in FY22 from 0.8 in FY20.

For the company, FY22 ended on a “good note” with the group recording the highest ever EBITDA of Rs 881 crore and net profit of Rs 260 crore on a consolidated basis in the past 10 last years.

“Our strategy of focusing on the core business and recalibrating the fundamentals of each business, such as revenue, costs and working capital, has yielded rich dividends for the Raymond Group. Maintaining our focus on cost optimization and significantly reducing our operating costs by Rs 453 crore from pre-Covid levels in FY 2019-20 was critical for our business,” said the Chairman and Director. Raymond’s general, Gautam Hari Singhania, in his message to shareholders. .

Speaking on the new dimensions of retail, Singhania said the post-pandemic world has opened up new avenues for consumers to interact and shop.

“While brick-and-mortar retail will continue to thrive in India, the digital world and social commerce are growing rapidly in India,” he added.

Regarding the outlook, the company said in the annual report that it expects to be on profitable growth momentum, with overall positive consumer sentiment in the domestic market due to the upcoming wedding season. summer and the increase in social gatherings. In the export market, B2B apparel and engineering companies are expected to maintain good order flow.

The consolidation of B2C activities, including apparel, into Raymond will generate synergies in design and innovation, supply and operational efficiency, while the consolidation of engineering activities is expected to generate synergies in development trading, raw material sourcing and logistics and overall administrative processes, he added.


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